The geopolitical standoff between the US and Iran remains unresolved; gold prices are experiencing a short-term pullback, but the medium- to long-term outlook remains positive.
2026-04-29 22:00:59
Gold continued to fall during the Asian and European sessions on Wednesday (April 29), currently down 1.17% and trading around 4540.
The US and Iran remain locked in a standoff over the Strait of Hormuz. President Trump has ordered his staff to develop contingency plans for a prolonged blockade of Iran, while Iran has warned that it will take "unprecedented military action" if the US continues to seize ships linked to it.
The Federal Reserve is about to officially announce that it will maintain the benchmark interest rate unchanged, and it is highly likely to release hawkish language, reshaping and tightening market expectations for the Fed to implement monetary easing.
Due to the advance pricing of policy expectations, the gold market has already reacted and begun a weak adjustment.
The current geopolitical situation between the US and Iran remains in a state of prolonged confrontation, and geopolitical risk aversion continues to support crude oil prices, resulting in a clear divergence between strong oil and weak gold in the market. This trend is unlikely to reverse or break through in the short term.
Meanwhile, given that it will take a long time for global crude oil production capacity to fully recover, Standard Chartered has raised its crude oil price forecast: it has raised its 3-month New York crude oil price forecast to $80-90 per barrel and its 12-month oil price forecast to $70 per barrel.
According to data from the World Gold Council, global demand for gold has declined during the gold price correction.
Among the factors dragging down gold prices were the continued outflow of gold ETF holdings and sluggish sales of physical gold jewelry.
However, the global central bank gold-buying spree shows no signs of abating, maintaining a large net purchase pace with a significant year-on-year increase in the scale of purchases. Supported by the continued gold hoarding by central banks, gold prices have maintained a strong upward trend overall on a quarterly basis.
(Gold supply and demand data, source: World Gold Council)
Despite the short-term fluctuations and decline in gold prices, top investment figures and mainstream investment banks remain firmly optimistic about the future of gold.
Bridgewater founder Ray Dalio recently reminded investors again that the recommended allocation of gold in an asset portfolio should be kept at 10%-15%.
Standard Chartered Wealth Solutions’ Office of Global Chief Investment Officer released its May global market outlook, maintaining its overweight rating on gold while lowering its valuation accordingly. The office reduced its 3-month target price for gold to $5,200 per ounce and its 12-month target price to $5,500 per ounce.
From a fundamental perspective, high crude oil prices have led to a sharp decline in the dollar revenue of oil-producing countries, which in turn has resulted in a regional shortage of dollar liquidity and a dollar shortage.
To fill the liquidity gap, the market passively sold off gold, directly suppressing short-term gold prices. If the geopolitical situation between the US and Iran eases, gold's suppressed valuation will have an opportunity to recover, and gold prices are expected to return to an upward trend. At the same time, the core narrative of a weak dollar and global de-dollarization will regain dominance, providing strong support for gold's medium- to long-term trend.
Since the 2008 financial crisis, central banks around the world have cumulatively increased their gold reserves by more than 225 million ounces, and the proportion of central bank dollar assets in their holdings has fallen from a peak of more than 60% at the beginning of this century to the current level of about 40%.
The increase in gold reserves is no longer limited to major countries such as China, Russia, India, and Türkiye. Many countries, including Kazakhstan, Saudi Arabia, Qatar, Egypt, and the UAE, have joined the gold-buying camp.
If the trend of central bank gold purchases continues, the proportion of gold in global central bank foreign exchange reserves is expected to steadily climb from the current 30% to 40%, further consolidating the fundamental basis for gold's long-term preservation and appreciation of value.
Technical Analysis: As analyzed in previous articles, after breaking below the lower channel line, it will continue to look for support downwards. Currently, the support is around 4500. Any movement of the gold price away from 4500 has a high chance of returning to 4500.
(Spot gold daily chart, source: FX678)
The US and Iran remain locked in a standoff over the Strait of Hormuz. President Trump has ordered his staff to develop contingency plans for a prolonged blockade of Iran, while Iran has warned that it will take "unprecedented military action" if the US continues to seize ships linked to it.
The Federal Reserve is about to officially announce that it will maintain the benchmark interest rate unchanged, and it is highly likely to release hawkish language, reshaping and tightening market expectations for the Fed to implement monetary easing.
Due to the advance pricing of policy expectations, the gold market has already reacted and begun a weak adjustment.
The long-standing geopolitical standoff between the US and Iran, characterized by a strong oil market and a weak gold market, is unlikely to break out in the short term.
The current geopolitical situation between the US and Iran remains in a state of prolonged confrontation, and geopolitical risk aversion continues to support crude oil prices, resulting in a clear divergence between strong oil and weak gold in the market. This trend is unlikely to reverse or break through in the short term.
Meanwhile, given that it will take a long time for global crude oil production capacity to fully recover, Standard Chartered has raised its crude oil price forecast: it has raised its 3-month New York crude oil price forecast to $80-90 per barrel and its 12-month oil price forecast to $70 per barrel.
Diverging demand structure in gold, with central banks' large-scale gold purchases providing strong support.
According to data from the World Gold Council, global demand for gold has declined during the gold price correction.
Among the factors dragging down gold prices were the continued outflow of gold ETF holdings and sluggish sales of physical gold jewelry.
However, the global central bank gold-buying spree shows no signs of abating, maintaining a large net purchase pace with a significant year-on-year increase in the scale of purchases. Supported by the continued gold hoarding by central banks, gold prices have maintained a strong upward trend overall on a quarterly basis.
(Gold supply and demand data, source: World Gold Council)
Industry leaders and investment banks agree that gold's medium- to long-term investment value is becoming increasingly apparent.
Despite the short-term fluctuations and decline in gold prices, top investment figures and mainstream investment banks remain firmly optimistic about the future of gold.
Bridgewater founder Ray Dalio recently reminded investors again that the recommended allocation of gold in an asset portfolio should be kept at 10%-15%.
Standard Chartered Wealth Solutions’ Office of Global Chief Investment Officer released its May global market outlook, maintaining its overweight rating on gold while lowering its valuation accordingly. The office reduced its 3-month target price for gold to $5,200 per ounce and its 12-month target price to $5,500 per ounce.
Deeper Market Logic: Short-Term Pressure Does Not Change Long-Term Trend
From a fundamental perspective, high crude oil prices have led to a sharp decline in the dollar revenue of oil-producing countries, which in turn has resulted in a regional shortage of dollar liquidity and a dollar shortage.
To fill the liquidity gap, the market passively sold off gold, directly suppressing short-term gold prices. If the geopolitical situation between the US and Iran eases, gold's suppressed valuation will have an opportunity to recover, and gold prices are expected to return to an upward trend. At the same time, the core narrative of a weak dollar and global de-dollarization will regain dominance, providing strong support for gold's medium- to long-term trend.
Global central banks continue to accumulate gold, solidifying the long-term value foundation of gold.
Since the 2008 financial crisis, central banks around the world have cumulatively increased their gold reserves by more than 225 million ounces, and the proportion of central bank dollar assets in their holdings has fallen from a peak of more than 60% at the beginning of this century to the current level of about 40%.
The increase in gold reserves is no longer limited to major countries such as China, Russia, India, and Türkiye. Many countries, including Kazakhstan, Saudi Arabia, Qatar, Egypt, and the UAE, have joined the gold-buying camp.
If the trend of central bank gold purchases continues, the proportion of gold in global central bank foreign exchange reserves is expected to steadily climb from the current 30% to 40%, further consolidating the fundamental basis for gold's long-term preservation and appreciation of value.
Technical Analysis: As analyzed in previous articles, after breaking below the lower channel line, it will continue to look for support downwards. Currently, the support is around 4500. Any movement of the gold price away from 4500 has a high chance of returning to 4500.
(Spot gold daily chart, source: FX678)
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